Colorado-based Abound Solar announced this week it has been forced to lay off 180 of its 400 workers as it tries to retool to produce a more efficient type of solar panel in order to keep a technological edge on Chinese manufacturers who are flooding the market with less expensive models. Abound received approval in 2010 for a $400 million government loan.

"As you know the solar market has been extremely difficult for all manufacturers," said Craig Witsoe, the CEO of Abound Solar, in an interview with ABC News on Wednesday. "To continue to make the panel we make today, to have to sell it below cost, it's a tough environment to operate in."

It is one of four companies that have been issued a combined $1.3 billion in loans by the Obama administration to operate in the highly competitive field of solar manufacturing. Solyndra, the best-known of those recipients, filed for bankruptcy last year, touching off a wave of controversy about the role of government money in backing high-risk start-up firms in the alternative energy field, and an investigation by Republicans on the House Energy and Commerce Committee.

Energy Department officials noted Wednesday that the federal loan to Abound had Republican support, including an $11.8 million tax credit from an Indiana economic development board chaired by Republican Gov. Mitch Daniels.

"We will continue to work with Abound as we do with all of our loan recipients as it works through these issues," said Damien LaVera, a DOE spokesman. "While the challenges facing solar manufacturers have been widely reported, we continue to believe that supporting innovative companies like this is important to ensuring our nation has the ability to compete for the clean energy jobs of tomorrow."

The Energy Department loans cut across a range of "green" technologies, and several of the recipients have been exhibiting signs of distress in recent weeks. Earlier this month, electric car start-up Fisker Automotive announced it was being forced to halt production at its Delaware facility and lay off several dozen workers. In November, the company developing batteries for Fisker announced the temporary layoff of 125 employees. A123 Systems had received a $249 million Department of Energy stimulus grant.

Witsoe said the solar manufacturing sector has been especially hard-hit because of stiff competition from Chinese companies, which he says have selling below cost and dumping solar panels on the American market.

"We fully support global competition as long as it's fair," Witsoe told ABC News. "It's a company like us versus a country. China plays very hard."

In order to compete, Witsoe said Abound is retooling its manufacturing facilities to bring to market a more advanced, more efficient solar product that will keep the company ahead of its foreign competitors. But while that work is being done, he said, the company could not maintain the size of its workforce and had to make the painful job cuts.

The company maintains its goal of producing its unique brand of solar panels for commercial customers at facilities in Colorado and Indiana. It has drawn down $70 million so far from a $400 million federal loan and has been in discussions with the Department of Energy about revising the terms of its loan to insure it continues to have access to the federal funds.

"The jobs will definitely come back," Witsoe said. "When we rescale with the new product, we will need to hire back likely as many people as we had. We know this is a really difficult thing. We hate to have any job loss in the company. But it was the right decision for the business."

Obama: Green Energy Loans Based on 'Best Judgments'

Back in October, President Obama responded to questions about the risk assumed by his administration when it decided to back green energy start-up ventures with taxpayers' money. He stood behind the decision, saying it was important for the government to support the push into alternative forms of energy, and the program had the potential to pay dividends in the form of thousands of new jobs.

"There were going to be some companies that did not work out," Obama told reporters. "All I can say is the Department of Energy made these decisions based on their best judgments."